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finance: Early retirement due to stock market tumble - 10/20/08 12:02 PM
The father of a friend of mine has been flying for American Airlines for over 30 years. Though this pilot will only be turning 60 this November, he has decided to take an early retirement. He has some very foresightful reasoning for doing so.
Knowing that his pension is linked to the stock exchange, this man took the chance a year or two ago to lock in his retirement income amount to what the stock market was doing then. I'm not sure of the logistics, but this lock only lasts a couple of years. Rather than retiring in a few years … (3 comments)
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finance: "9/11 was big. This is bigger." - 10/07/08 11:07 AM
Seven years ago, President Bush addressed the nation in order to shore up confidence in US strength and supremacy after the 9/11 attacks. This last month, the President addressed us again to try to quell growing fears about the financial crisis that is rocking the nation.
According to an article (with the same title as this post) by David Rothkopf published yesterday in the Washington Post, the crisis we are facing today is not only bigger in scope than the 9/11 crisis, but it may signify the end of an era. America is the main global superpower and has been singing … (9 comments)
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finance: Good News Monday - No Panicking Allowed for Wall Street Fears - 09/29/08 11:59 AM
The media has accurately predicted 33 of the last 4 recessions.
-- Zig Ziglar
We all know that the media tends to feed on drama, reporting bad news when it's available, and finding bad news to report when nothing horrible is happening. They have a lot to report these days!
One fear the media is feeding on right now is people's fear of losing a lot of money and savings due to the stock market's wild fluctuations lately. While there is no way of denying the roller coaster ride going on down on Wall Street, we thought we'd throw some … (4 comments)
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finance: Massively important update on Wall Street and the bailout – we need your help! - 09/26/08 01:23 PM
Please read to the very end. This stuff is incredibly important!
A favorite financial pundit of mine* presented the plan on his radio show, and I think it’s quite good. It eliminates the need to lend $700 billion to Wall Street (you and I will each personally pay about $35,000 to do this, by the way). Curious? Keep reading...
Understanding the details of this plan requires a little accounting lesson. Bear with me, it’s very important. The term to understand is mark-to-market accounting.
Part of the Enron and WorldCom scandals had to do with improper valuation of assets. Or in … (14 comments)
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finance: Seeing the dark side of bailing out Wall Street - 09/24/08 11:57 AM
Last week I admitted, albeit with a lot of trepidation, that the government's proposed $700 billion Wall Street bailout may be what the doctor ordered.
I thought it might be what the market needed to stop its panicked hyperventilations. I thought that for this one time, it might be worth it to suspend my dislike of big government and admit that the move was necessary. I decided to ignore the potential dark side and breathe a sigh of relief for a day.
I'm starting to doubt myself. There are a couple things about the idea that are scratching at my neck … (16 comments)
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finance: Bailing out Wall Street and other things that make me squirm - 09/19/08 12:13 PM
Don't get me wrong, I have my opinions about politics. Generally I just like to keep them to myself. I'll make an exception when it comes to Big Government.
I don't like it. Not one bit. Get your hand out of my wallet, Uncle Sam.
So when I heard the news that the US government plans on creating a separate fund to buy bad debt off of the books of struggling banks and other Wall Street players, I got on my high horse and started preaching to anyone who would listen (ie, the cats and the trash collector) about the … (12 comments)
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finance: Understanding the hullabaloo over AIG: For Dummies* - 09/17/08 04:03 PM
It was unavoidable in the news yesterday: the insurance firm AIG was in trouble, and a lot of it! Lehman Brothers Bank was too, but there was more to-do about AIG.
Here's the non-financial analyst (ie, Dummy) version of what's going on:
Last night, the Federal Reserve pulled that old trick that's becoming too familiar, the old let's-use-public-funds-to-pay-private-debts trick, and loaned AIG $85 billion to help it avoid bankruptcy. AIG will have two years to pay back the loan, and in the meantime will be selling a lot of assets.
Although I'm not wild about the government stepping in where private … (2 comments)
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finance: Lehman Brothers and Murphy's Law: I have the power to stop the madness! - 09/15/08 01:44 PM
I am glad I reminded you all last week how to breathe, because the news this morning is sure to have a few of us at risk of hyperventilation.
After all the tumultuous news last week, Lehman Brothers Bank finally filed for bankruptcy. LBB's demise is not unexpected: we knew since last week that there would be no government bailout (thankfully). But it's still something of a slap in the face to an economy on its knees.
You and I aren't going to feel the effects of the collapse directly, as there are no consumer loans or bank accounts involved with … (9 comments)
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finance: Lehman Brothers dragging down the market - 09/11/08 12:45 PM
Lehman Brothers shares dropped 45% on Tuesday, leading the stock market on the whole to decline by almost 3.5%.
I was expecting a lot more drama and to-do about Lehman Brother's tribulations, and was surprised at the comparatively small amount of press that it got, at least compared to the Fannie Mae bailout and Bear Stearns a while back. In a flight of Sherlock Holmes-ian fancy, I hopped onto the information superhighway (specific destination: Google) to try to solve the mystery.
One of the search results was a blog on the Wall Street Journal that did a great deal to explain … (8 comments)
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finance: Open your wallet: Fannie Mae needs you - 09/08/08 11:21 AM
It's official.
We were prepared for this to happen a few months ago, and the day has arrived: Uncle Sam stepped in and made good on his promise to bail out Freddie Mac and Fannie Mae if things looked like they were getting particularly bad.
The markets liked the news, and took a nice little hop, skip and a jump higher. Wall Street is holding its breath in the hope that the news could be the beginning of a turnaround in the US' dismal credit market.
As for me, I'll admit to having a very selfish reaction. How will this move … (4 comments)
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finance: All news is good news to this Canadian! - 09/05/08 12:34 PM
I was lucky: I got to grow up in Canada.
Canadian culture is very similar to that of America, almost like how fraternal twins look very similar but not quite the same. Moving to the US in 2003 was therefore not a huge shock to my system (although I'll admit to being a little overwhelmed by the speed on California's freeways).
Another difference was that in Canada I studied health science and linguistics, and admittedly knew little of economics or finance. When I moved to the US, I began studying to get my finance degree and news items on that topic … (0 comments)
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finance: Are sleazy real estate professionals getting their due? - 08/22/08 02:00 PM
If you feel like being sleazy and committing a crime as a real estate professional against your clients, go ahead. Just be prepared to face up to 3 years in jail, and have your license permanently revoked (that is, if you even have one).
That's the basic outcome of California's Bill 1737 that passed the state congress this week. To be quite honest, I'm not entirely sure how different this bill is from the laws that already existed, but I suppose that it's a step in the right direction for setting the real estate bar just a little higher.
Senator Michael … (6 comments)
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finance: OC Real Estate - movin' and shakin' - 08/21/08 12:48 PM
I saw some interesting numbers today regarding Orange County real estate. Check this out:
median home price in June, 2007: $645,000 (all-time high in the region) median home price in July, 2008: $461,000 total drop: $184,000 or 28% putting it in perspective: homes in Orange County lost an average of $431 per day over the last 13 months Is that not incredible? Now, it's generally agreed that such a drastic correction, though painful, was necessary in this market, which was way overpriced.
I hope you've come to expect this of me, dear readers, and I won't disappoint. Here's the good news:
… (6 comments)
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finance: A small break for OC homeowners - 08/20/08 01:42 PM
When I'm wrong, I usually don't mind to admit it (well, except when I have to admit it to my significant other).
So, I'll admit it: I was wrong.
With foreclosures soaring and home prices falling, I was sure that rental rates in Orange County would be going through the roof as opportunistic real estate investors started charging higher prices. But it turns out that the year over year rental rate since last July has only increased by 4.7%, the smallest increase since 2000 (check it out here).
I actually breathed a little sigh of relief when I read the news. … (2 comments)
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finance: Is a reverse mortgage right for you (or your clients)? - 08/19/08 12:19 PM
You've been hearing a lot about them lately, but do you actually know what a reverse mortgage is?
The reverse mortgage works very similarly to a negative amoritzation loan, where instead of paying down the principal as with a traditional loan, a balance is actually added monthly to the principal. In order to decide whether to do the loan, a lender looks only at the equity in the home. Sometimes the borrower makes payments on the loan, and sometimes the lender actually pays the borrower (imagine that!).
The only requirements to obtaining a reverse mortgage are that you need to be … (9 comments)
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finance: Gesundheit, America! - 08/18/08 01:06 PM
In John Mauldin's ever-educational newsletter this week, Mauldin delves into that wonderful old adage that when America sneezes, the rest of the world catches a cold. Taking into consideration GDP, there may be some truth to the saying.
Whether the US is officially in a recession is debatable: it's supposed to be defined as two quarters of negative GDP, which hasn't been seen yet, BUT... the economy is not exactly booming. Looking at last quarters GDP numbers in the graph at the right (reproduced from the newsletter), Europe's economies are not doing so hot either. Italy, the Netherlands, and the UK … (0 comments)
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finance: Uncle Ben and the Inflation Problem - 08/14/08 01:27 PM
There's something very comforting about Ben Bernanke (Federal Reserve Chairman). I don't know what it is, but he seems to have the face of a really nice uncle or grandpa who's always there for you, steady as a rock.
I read today that the year over year CPI (consumer price index, an important measure of inflation) was reported at 5.6%. Even after taking out the highly volatile food and oil prices, the year over year core CPI is now at 2.5%. The Fed generally wants to keep that number between 1-2% for the year.
So right now, I'm feeling for kindly … (4 comments)
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finance: Visiting the Taj Mahal? Leave your dollars at home... - 08/13/08 12:02 PM
We all know that the American dollar is having a bit of a breakdown right now. This time last year, you could buy a euro for about $1.34. To buy that same euro today will cost you $1.49.
One result of this slide, as reported in the BBC today, is that some American shop owners are starting to hedge their losses a little. Apparently, some New York shops are accepting euros now instead of dollars only, so they don't lose out on the foreign exchange.
That I can understand. Those wily New Yorkers, they'll figure out anything to save a buck … (0 comments)
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finance: Fannie Mae and the 100-Year Storm - 08/12/08 12:28 PM
According to Fannie Mae CEO Dan Mudd, the company is trekking its way steadily through the "99th year of a 100 year storm." Although housing prices are still declining in many areas of the US, Fannie Mae is forecasting that the cost of weathering the credit crisis will peak within the year.
The firm has posted a loss for four quarters now, partly due to contributions to its "rainy day fund" where it's stocking up money to help offset future losses. Also, in spite of government pledges to bail out Fannie and her brother, Freddie Mac, stock prices are still falling … (4 comments)
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finance: Economic Stimulus Act of 2008 - 08/01/08 01:36 PM
The following article was written by Laurel Mann, a Waddell & Reed Financial Planner and strategic partner with January Financial. The article is being reprinted here with her permission.
Earlier this year, President Bush signed into law the Economic Stimulus Act of 2008, a piece of landmark legislation that will provide income tax rebates to approximately 130 million U.S. households.
It will also provide an opportunity for those looking to invest in their financial futures.
Beginning in May and throughout the summer, rebates will be delivered to taxpayers nationwide. In anticipation of receiving your rebate, perhaps you're contemplating how to make … (0 comments)
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Carey Pott
Foothill Ranch,
CA
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January Financial
Address: 28 Rue Fontaine, Foothill Ranch, CA, 92610
Office Phone: (949) 305-6355
Cell Phone: (714) 306-4969
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